Stimulus for Russian oligarchs

This is from Karen Dawisha’s more-important-than-ever Putin’s Kleptocracy: Who Owns Russia?:

When the economy almost collapsed in 2008, the Russian government bailed out state-supported banks first, to the tune of 5 trillion rubles (approximately $230 billion), in a move which government ministers who sat on boards (such as Finance Minister Kudrin, who sat on the board of VTB Bank) simply helped themselves to their own private stimulus package.  But instead of using the money to stabilize the Russian ruble (which plummeted from 23RR/US$ to 36RR/US$) or the stock market (which lost 80 percent of its value), it only stimulated capital flight.  Kudrin estimated that between October 2008 and January 2009, $200 billion was taken out of the country — i.e., virtually the entire stimulus.

This book contains a remarkable amount of research.  The point I wish to make today is that the Russian economic collapse is just beginning to unfold.


Comments for this post are closed